Comparative advantage explanation, drawing production possibilities curves

Suppose that, with a given unit of labour, India can produce 40 basketball hoops or 60 basketballs and Nepal can produce 10 basketball hoops or 30 basketballs. This scenario is illustrated below. output hoops (H) balls (B) India 40 60 Nepal 10 30 a.) Explain absolute and comparative advantage for India and Nepal. b.) If each country has 1000 person-days of labour, construct each country’s production-possibility curves. c.) If Nepal wants to consume equal amounts of both goods (as many units of hoops as balls), how much of each good will be produced and consumed if there is no trade between the two countries? d.) Assume that the equilibrium terms of trade are 1... click for more

Heckscher-Ohlin theory

Please Provide an Elaborate answer as long as possible. I need to understand these concepts for future exams and i cannot answer such questions. (a) Explain what is meant in the Heckscher-Ohlin theory by (i) The relative factor intensity of a commodity, (ii) the relative factor abundance of a country. (b) How are these concepts used to explain the commodity composition of trade? (c) Demonstrate that under this analysis commodity movement and factor movement are substitutes for each other.

Interest parity and uncovered interest parity

Explain how the conditions of covered interest parity and uncovered interest parity are reached, and indicate the implications of the analysis for the prediction of the future spot rate.

Exchange rates / spot / forward markets

Demonstrate how a UK exporter can avoid exchange risk by covering in either the spot market or the forward market. When will the exporter be indifferent between these two forms of cover?

Balance of payments deficit correction

How do (a) the elasticities approach, (b) the absorption approach, and (c) the monetary approach, explain the process by which a balance of payments deficit is corrected under a flexible exchange rate system?